Nothing Special   »   [go: up one dir, main page]

Marketing Strategy Mcdonald

Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1of 9

Marketing Strategies at McDonald’s

MARKETING STRATEGIES OF MCDONALD’S

Franchise Model

Only 15% of the total number of restaurants is owned by the company. The remaining 85% is
operated by franchisees. The company follows a comprehensive framework of training and
monitoring of its franchises to that they adhere to the Quality, Service, Cleanliness and Value
propositions offered by the company to its customers.

PRODUCT CONSISTENCY

By developing a sophisticated supplier networked operation and distribution system, the


company has been able to achieve consistent product taste and quality acrossgeographies.

ACT LIKE A RETAILER AND THINK LIKE A BRAND

It focuses not only on delivering sales for the immediate present, but also protecting its long term
brand reputation.

RE-ENGINEERING THE MENU

McDonalds think according to the customer’s taste, value systems, lifestyle, language and
perception. Globally McDonalds was famous for its hamburgers which are prepared from beef
and pork burgers. But, due to religious reasons of some of its customers and to satisfy their
demand and preferences, McDonalds came up with chicken and fish burgers to suite those
customers.

THE VEGETARIAN CUSTOMER

There are many vegetarians in the U K. To satisfy these customers’ demand, McDonald’s came
up with a completely new menu of vegetarian items like McVegggie burger, Spicy Veggie wrap.

SEGMENTATION, TARGETING AND POSITIONING

Customer perception is a key factor affecting a product’s success. Many potentially


Marketing Strategies at McDonald’s

revolutionary products have failed simply because of their inability to build a healthy perception
about themselves in their customers’ mind. McDonalds being an internationally renowned
brand brings with it certain expectations for thecustomers.

McDonalds uses demographic segmentation strategy with age as the parameter. The main target
segments are children, youth and the young urban family. If we take children into consideration,
children are most attracted towards toys and delicious meals. Today’s youth also prefer such
places for their entertainment and the urban families select McDonalds on various occasions like
birthday party, etc

Table: targeting, Positioning and Differentiation

Since kids are on the top most level of purchased food products. So to attract children,
McDonalds has Happy Meal in which they give one toy on each happy meal, there are toys
ranging from hot wheels to various Walt Disney characters. Example of the latest range is the
toys of the movie Madagascar. For this, they have a tie – up with Walt Disney. At several outlets,
it also provides special facilities like “Playing Place” where children can play arcade games, air
hockey, etc. This strategy makes McDonald’s a fun place where customers can enjoy both
playing and eating. This also helps McDonalds to attract young urban families who want to
spend some quality time, while their children can enjoy every moment at the McDonald’s. To
target the teenagers and young youth, facilities like WI – FI are also provided on theoutlets.

McDonald’s as a place for the entire family to enjoy. When McDonald’s entered UK, it was
mainly targeting the urban upper class people. But today, it has positioned itself as an affordable
place to eat without compromising on the quality of food, service and hygiene. The outlet
atmosphere and mild background music highlight the comfort that McDonald’s promises in the
slogans like “YOU DESERVE A BREAK TODAY”, “FEED YOUR INNER CHILD”. This
commitment of quality of food and services in a clean, hygienic and relaxing atmosphere has
ensured that McDonald’s maintains a positive relationship with its customers.

In order to create a marketing strategy that will enable the needs of the key market to be met, the
Marketing Strategies at McDonald’s

strengths and weaknesses of the organization must first be identified and analysed.

Once the strengths and weaknesses are determined, they are combined with the opportunities and
threats in the market place. This is known as SWOT analysis - strengths, weaknesses,
opportunities, threats. The business can then determine what it needs to do in order to increase its
chances of marketing successfully.

SWOT ANALYSIS

1) STRENGHTS
 GLOBALBRAND
McDonald’s has a very well – established global brand that appeals to all age
groups and customer segments. In 2005, McDonald’s placed ninth in the top 100
global brands ranking of the “Business Week Magazine and the Interbrand”.
 STRONG OPERATIONALCAPACITIES
McDonald’s has strong operational capabilities which allows it to provide high
quality products and customer services across its restaurants. It has a world –
class supply chain and standardized process to deliver products of uniform quality
across all restaurants, regardless of their locations or nature of operation
(company – owned or franchise -oriented).
 SUCCESSFULITEMS
Some of its products such as Big Mac, Chicken McNuggets have become brands
in their own right. Strong brand draws customers to the company’s restaurants
and provides it with a well-recognized brand currently in newmarkets.
 QUALITYPRODUCTS
McDonald’s is the symbol of quality with respect to its offering.
2) WEAKNESS
 WEAK REVENUEGROWTH
Low revenue growth suggests that the company has not been able to expand
Marketing Strategies at McDonald’s

customer traffic at existing restaurants thanks mainly to the maturation and


saturation of its key markets.
 WEAK PRODUCTDEVELOPMENT
McDonald’s faces a strong competition and its weak product development creates
problem.
3) OPPORTUNITIES
 EXPANSION
There is a large market for McDonald’s still to serve. Furthermore it has few
outlets within cities in which it is currently serving, so McDonald’s also has
opportunity to expand within cities.
 FRANCHISEE – OPERATEDRESTAURANTS
McDonald’s intends to sell about company – operated restaurants to franchisees.
The operating margin of franchisee – operated restaurants is higher than that of
company – operated restaurants. The sale of company – operated restaurants to
franchisees is likely to increase the overall profitability of McDonald’s business.
 GROWING DIVING – OUTMARKET
As the lifestyle trends of consumers are changing, the dining out market is
growing, that would serve as an opportunity for the McDonald’s.

4) THREATS
 INTENSECOMPETITION
McDonald’s restaurants face intense completion from international, national,
regional and local retailers of food products. The company competes on the basis
of price, convenience, service and quality of food products. the company’s
competition includes restaurants, quick service eating establishments, pizza
parlours, coffee shops, street vendors, convenience food stores, delicatessens and
supermarkets.
 GROWING HEALTHCONSCIOUSNESS
As the education level has increased, health consciousness has also increased. A
growing consciousness of health matters could reduce McDonald’s.
 INCREASED SALESTAX
Sales tax has increased which results in the increased customer prices and reduced
sales level.

CUSTOMER PERCEPTION AND CUSTOMER EXPECTATION


Marketing Strategies at McDonald’s

Customer perception is a key factor affecting a product’s success. Many potentially


revolutionary products have failed simply because of their inability to build a healthy perception
about themselves in the minds of the customers. McDonald’s being an intentionally renowned
brand brings with it certain expectations for thecustomers.

Customers expect it to be an ambient, hygienic and a little sophisticated brand that respects their
values. The customers expect the brand to enhance their self – image.

FULLFILLING CUSTOMER EXPECTATIONS

Another greatest strength of McDonald’s is its product value. To fulfil customer’s expectations
when they walk in their franchise becomes their strongest marketing element.

 INNOVATION
 OVEREXPOSURE
 CUSTOMERTRENDS
 EXTERNALENVIRONMENT
Threats and opportunities prevail in any company’s external environment:
 Technology
 Politics
 Law

MCDONALD’S MARKETING MIX (5P’S STRATEGY)

After analysing the market, finding the key factor, target segments and understanding the market
demand, every company needs to come up with an offer or such type of plan, which speeds up
the growth of the company. For which McDonald’s uses the 5p’s of marketing mix which are as
follows:

1) PRODUCT
2) PLACE
3) PRICE
4) PROMOTION
5) PEOPLE
Marketing Strategies at McDonald’s

PRODUCT:

Product isthe physical product or service offered by a companyto its consumers.


Product includes certain aspects such as packaging, guarantee, looks etc. This
includes both the tangible and the non- tangible aspects of the product andservice.

The important thing to remember when offering menu items to potential customers is that there
is a huge amount of choice available to those potential customers with regard to how and where
they spend their money. Therefore McDonald’s places considerable emphasis on developing a
menu which customers want. Market research establishes exactly what this is. However,
customers’ requirements change over time. What is fashionable and attractive today may be
discarded tomorrow. Marketing continuously monitors customers’ preferences. In order to meet
these changes, McDonald’s has introduced new products and phased out old ones over time, and
will continue to do so. Care is taken not to adversely affect the sales of an existing option by
introducing a new option which will cannibalise its sales (trade off). McDonald’s knows that
sales of products on its menu will vary at different points in their life cycle as is illustrated on the
graph to the right. The type of marketing undertaken and the resources invested will be different
depending on the stage a product has reached. For example, the launch of a new product will
typically involve television and other advertising support. At any time a company will have a
portfolio of products, each in a different stage of its cycle. Some of McDonald’s options are
growing in popularity while arguably the Big Mac is at the ‘maturity’stage.

It studied the behaviour of the UK customer and provided a totally different


menu

McDonald’s studied the behaviour of the UK customer and provided a totally different menus as
compared its International offering. McDonald’s continuously innovates its products according
Marketing Strategies at McDonald’s

to the changing preferences and tastes of its customers. McDonalds bring with it a globally
reputed brand, world class food quality and excellent customer specific productfeatures.

Place

Place, as an element of the marketing mix, is not just about the physical location or distribution
points for products. It encompasses the management of a range of processes involved in bringing
products to the end consumer. The place mainly consists of the distribution channels. It makes
the product available to the customer at the right place, time andquantity.

There is a certain degree of fun and happiness associated with each time spent at the
McDonald’s. It offers hygienic environment, good ambience and great service. Now McDonald’s
has started giving internet facility at outlets mixed with music. They also provide areas for
children to play as their parents have some qualitytime.

PRICE
The customer’s perception of value is an important determinant of the price charged. Customers
draw their own mental picture of what a product is worth. A product is more than a physical
item; it also has psychological connotations for the customer. The danger of using low price as a
marketing tool is that the customer may feel that a low price is indicative of compromised
quality. It is important when deciding on the price to be fully aware of the brand and its integrity.
A further potentially adverse consequence of price reduction is that competitors match the lower
prices resulting in no extra demand. This means the profit margin has been reduced without
increasing thesales.

Pricing should take into consideration the probable reaction from the competitor. This is the most
important part of the marketing mix as this is the only part which generates revenue. All
the other four are expenses incurred in the business. The price must take into
consideration the appropriate demand – supply equation. McDonald’s came up with a very
catchy punch line. McDonalds has certain value pricing and bundling strategies such as
“happy meal”, “combo meal”, “familymeal” to increase overallsales.
Marketing Strategies at McDonald’s

Promotions

Promotions cover all types of marketing communications. One of the methods employed is
advertising. Advertising is conducted on TV, radio, in cinema, online, etc. What distinguishes
advertising from other marketing communications is that media owners are paid before the
advert can take space in the medium. Other promotional methods include sales promotions, point
of sale display, merchandising,etc.

The various promotion channels being used by McDonald’s to effectively


communicate theproduct information are given above. A clear
understandingofthecustomervalue helps decidewhetherthecostofpromotion is worth spending.
The three main objectives of advertising for McDonald’s are: to make people aware of
an item, feel positive about it and remember it. The right message has to be communicated to the
right audience through the right media. M c D o n a l d ’ s d o e s its
promotionthroughtelevision,hoardingsandbusshelters.

Some of the most famous marketing campaigns of McDonald’s are:


 “You Deserve a break today, so get up and get away- ToMcDonald’s”
 “Food, Folks, andFun”
 “I’m lovingit”

These five promotion tools (advertising, personal selling, sales promotion, public relations and
direct marketing) are used by McDonalds to integrate marketing communication program which
allows McDonalds to access the communication channels clearly, consistently to easily transfer
messages and products to the customer.

People:

McDonald’s knows the value of both its employees and its customers. It understands the fact that
a happy employee can serve well and result in a happy customer.

The order of people for McDonald’s are (most important people are at the top):

1. Customers
2. Lineemployees
Marketing Strategies at McDonald’s

3. Middle Levelmanagers
4. Frontlinemanagers

The punch line “I’mloving it” is an attempt to show that the employees are loving their work at
McDonalds and will love to serve the customers

Conclusion

Once the marketing strategy is in place, various responsibilities are given to different individuals
so that the plan can be implemented. Systems are put in place to obtain market feedback which
measure success against short-term targets. McDonald’s has to ensure that this is done within the
confines of a tightly controlled, finite marketing budget

You might also like